Prime Minister and Minister of Finance
Member of Parliament for Cat Island Rum Cay and San Salvador
Hon. Philip Edward Davis KC MP
JUNE 7, 2023
Madam Speaker:
Last Friday was Labour Day – always an important occasion, but an especially moving one in the year that we celebrate our 50th anniversary of independence.
Because it was the courage of Bahamian workers, standing up for fairness, and justice, and dignity, that ignited a fire that could not be extinguished – a fierce conviction in the hearts of our people that we deserved to be a free and self-governing nation.
On Friday, I marched to honour our country’s leaders and activists, past and present.
I thank God for giving our country the fighters we needed, when we needed them, and showing us that when we stand side-by-side, shoulder-to-shoulder, injustice can be overcome.
That is a lesson that continues to echo and inspire. We can be very proud of how far we’ve come, while still acknowledging that there is so much work yet to do – to build a country in which all Bahamians are lifted up, to build a country in which every one of our children can reach for the stars.
That work is why we’re here today. That is the purpose driving us forward. And that is the vision – a vision which honours the dignity and potential of every one of us. That is the vision behind the budget we are presenting to the people of The Bahamas.
Madam Speaker:
Just as our nation’s independence was rooted in the courage of Bahamian workers, and just as the roots of a tree anchor it to the ground, my roots in Cat Island serve as my own anchor.
Over the weekend, I had a chance to dance with young and old, at the Rake ‘n Scrape festival, and to enjoy the warmth, humour and straight talk of Cat Islanders.
Cat Islanders are always going to serve you the truth, straight up.
It ain’t always pretty. But it does keep you real!
And it remains the great privilege of my lifetime to represent them, and to represent the equally straight-talking and magnificent people of Rum Cay and San Salvador.
It is wonderful to see progress coming alive in my constituency. We are a government with a serious plan for the development of our Family Islands – which you will hear about in great detail during this month of debate. We are going to bring progress and opportunity and new resources to our islands, while still maintaining the traditions, culture, and way of life that make them special.
But, Madam Speaker:
I hope you will permit me, on my birthday, an additional moment of reflection.
I have been thinking about some of my younger colleagues, who sit in Cabinet and in other positions of great responsibility, who entered government full of zest, ready to usher in a new day for the country.
They have overseen some exhilarating successes – and experienced the great blessing of seeing their hard work translate into real, tangible change for our people.
But there have been setbacks, too. That is because government is a human endeavor, and there is no human endeavor – no business, no church, no institution of any kind – which does not experience challenges, sometimes very serious ones.
Enduring progress is hard to deliver.
But we do this work to make a difference.
So even as we battle forces of inertia, or obstruction, or even dishonesty and malice, we must never lose sight of what a privilege it is to serve.
Look — accumulating so many birthdays has many upsides, and one or two downsides. It is possible – although I’m not confirming it — that I’m not quite the second baseman I used to be.
But one of the upsides is perspective.
So let me share what’s really important, what really matters:
In our first 20 months we opened two airports in the Family Islands — and we’re going to open 14 more.
Our policies to jumpstart our economy helped to generate extraordinary job growth — and we’re just getting started.
We raised the minimum wage and concluded nineteen labour agreements – with more to come.
We launched a new era in Bahamian agriculture – and we are going to continue to innovate and expand opportunities as we build food security for our country.
We built new affordable housing — and we’re going to keep on building, so more Bahamians have the security of home ownership.
We have recruited hundreds of new police, Immigration, and Defence Force officers, and our new budget ensures they will have the resources and technology to have a substantial impact.
We fortified our investment in border control, and strengthened security partnerships, and in so doing drastically reduced the number of migrants who reach our shores, despite the escalating crisis in the region – and our new budget provides resources and four new vessels to the RBDF.
We raised salaries and bonuses for nurses, and started a Catastrophic Health Care Fund – and now we’re building not one, but two, major new hospitals, renovating clinics across our islands, and launching a new organ transplant programme.
We cut import duties on dozens of food items, and invested in social service assistance – and our new budget provides resources for a new school breakfast programme.
We launched the National Youth Guard Programme, which provides training and skills for young people, who will bolster our capabilities during emergencies – and in our new budget, we have the resources to expand the programme – meaning that more young Bahamians and more communities across our country are going to be stronger because of it.
We are a leader in sports once again, hosting important games and events – and we’re going to continue to build the orange economy and develop Bahamian talent, with support for our extraordinary athletes, and a new school for the performing arts.
We have raised the country’s profile on the world stage, and become an important voice in the fight for fair climate finance – and we will continue to build alliances with small island states and others who share our sense of urgency about reducing global emissions and compensating those of us on the front lines of the battle.
So you see, Madam Speaker:
God has granted us this opportunity to serve, and we are serving with all our hearts.
We are choosing to be inspired by progress, rather than being discouraged by difficulty.
Though we are imperfect, we can still be used by God to accomplish his purpose.
Madam Speaker:
We live in extraordinary times. We must hold true to our traditions, our values, and our faith, while embracing the kinds of change and innovation that allow us to fully develop the potential of our nation and people. We have to be open to new opportunities, while navigating extraordinary economic and geopolitical uncertainty.
The budget for the new fiscal year focuses on three pillars for national development — National Security, Economic Security, and Personal Security.
The emphasis on security reflects our conviction that in order to thrive in the 21st century, we must grow stronger, invest in our resilience, and make our country less vulnerable to external shocks.
Our country is finally moving in the right direction, gaining the momentum we need to make such changes and investments.
The economy is open, the government’s fiscal performance is improving, Bahamians are working, businesses are thriving, and our children are making up for lost time.
We cannot predict when the next storm or plague will descend upon our shores. We cannot predict the trajectory of global inflation.
But we can be better prepared for crisis. And we can invest in our people and in our economy, so that we are also better prepared to seize new opportunities.
Recovering and Rebuilding: The First Twenty Months
Madam Speaker:
When we came into office, 20 months ago, we faced multiple urgent crises:
§ the nation had a ballooning debt and a fiscal crisis;
§ jobs were scarce and our economy, reeling from the curfew and a series of lockdowns, was in crisis;
§ our hospitals were full and our health care system was in crisis;
§ and our schools were closed, with no plan to repair and reopen them, leaving our children in crisis.
And much of these woes were intertwined with the heart of the problem: a governance crisis. A Competent Authority who turned out to be not competent at all. A government that became addicted to emergency powers.
When we came into office, we didn’t waste any time. We lifted the curfew, ended travel visas, provided free testing and free masks, instituted saner health rules, expunged records of minor breaches of the Emergency Orders, and worked hard to reopen schools and the economy.
We did what we’d promised to do: keep the virus at bay, but without strangling the economy. We understood that if we gave Bahamians the tools to stay safe and keep each other safe, we could fight the virus and revive the economy at the same time. We believed in Bahamians then, and we continue to believe in Bahamians now.
This path forward, and the progress made, would not have happened had the party opposite remained in power. During the campaign, they said our plan was reckless. They tried to scare people about what would happen if we took over the battle against COVID. The Competent Authority kept reminding us that he was a medical doctor. He said free testing could only happen in Wonderland. But I am not a medical doctor. And we made it happen, here, in The Bahamas. This is not Wonderland, Madam Speaker.
Our speed in getting rid of their economy-crushing policies was vital to turning the economy around and allowing businesses to thrive again. Up to Election Day, their former leader was backed up by his Cabinet colleagues, including the current leader. They defended their regime of curfews, travel visas, and repeated extensions of the emergency orders.
They defended their use of funds without following procurement policies and without proper controls being put in place.
Before that, they defended their government’s incompetent and heartless handling of Dorian. And before that, they defended a 60% increase in VAT.
And before that, they defended… Oban.
They defended the indefensible.
But we paid them no mind.
We were as eager as the Bahamian people to put their failed, oppressive policies in the rearview mirror.
We opened the economy and revived festivals and regattas, allowing the economy and job market to rebound as local businesses thrived and life returned to normal.
Unemployment levels are now down to pre-pandemic levels, and the nation is seeing record-breaking arrivals of visitors to our shores.
If only they had called the election even earlier, Madam Speaker, the country may have benefitted earlier from our evidence-based approach to pandemic management. While we re-opened the economy, we prioritized protection for the more vulnerable, including the elderly and those in healthcare facilities. We conducted 172,000 free COVID tests and distributed over one million free medical grade masks.
Madam Speaker:
Choices matter.
Governments do not run on autopilot and neither do economies. That the country is moving in the right direction today is the result of a measured and strategic approach, spanning many areas of policy-making.
Before I outline key measures in our new budget, I want to briefly review some significant aspects of the foundation we’ve built during our first 20 months. The work in the year to come builds on this very foundation.
In health care, we saw the vulnerabilities exposed in our healthcare system by the pandemic, and immediately invested in new infrastructure and expanded capacity in public healthcare facilities in New Providence and the Family Islands. We also hired additional doctors and nurses to strengthen public healthcare.
In education, we recognized that the years of missed schooling represented an emergency for our children and families. We repaired and re-opened schools for the return of in-person learning, launched a task force to tackle absenteeism, and undertook systemwide testing so we can address learning loss.
The Find Every Child initiative brought thousands of students back to school, providing them with social and learning support. We launched the National Smart Start Programme to provide workforce readiness skills to students left behind during the pandemic, so that they could qualify for jobs in this growing economy. We moved to hire 200 additional teachers to address pre-existing staffing shortages.
We expedited the rebuilding process for storm-affected islands, launched the Home Assistance Repair Programme, and passed presumption-of-death legislation to expedite that process for those who lost loved ones during Hurricane Dorian.
In our northern islands, as well as in New Providence and several Family Islands, we saw the urgent need for more affordable housing and we began to build right away. Our predecessors did not build a single home in over four years. Not a single home in four years.
Within months of our taking office, Bahamians had already began moving into their newly built homes, Madam Speaker, with keys in hand.
Building affordable housing is a priority for us because the high cost of living in The Bahamas prevents too many Bahamians from building economic security.
Life was already unaffordable for far too many, in our import-based economy – and then came the global inflation crisis.
Around the world, prices have risen to their highest levels in many decades.
The problem comes from outside our borders, but we have tried to reduce the impact. We lowered customs duties, expanded price controls, hired new price control inspectors, expanded BAMSI farmers markets. These measures helped – but not enough.
The real solution lies in increased domestic production – we must lower the nation’s food import bill. We are making major new investments in agriculture and food security, providing unprecedented funding for local farmers and agri-businesses. A major initiative, the Golden Yoke Egg Project, was launched earlier this year, with the worthy (and eggs-cellent!) goal of producing locally 100% of eggs consumed in The Bahamas.
We see all kinds of opportunities in agriculture – there is so much room for entrepreneurship and ingenuity. We want as many Bahamians as possible to participate in building a modern, climate-smart industry – starting your own company is an opportunity to do well for yourself and help your country at the same time.
Just as we support home ownership, and Bahamian ownership in farming and fishing, we are also committed to funding and offering resources to Bahamian business owners.
We allocated $50 million for micro-, small, and medium-sized Bahamian owned businesses – we plan to provide $250 million in funding to Bahamian businesses over the course of our term.
And for the first time ever, our country now has a National Trade Policy, to empower Bahamian businesses as they engage in international trade. Bahamians will now feel that the government is supporting them in exporting their goods abroad rather than impeding them with unnecessary bureaucracy and costs.
Madam Speaker:
Everyone knows I’m an island boy at heart.
My deputy, too.
But our commitment to Family Island development is a matter of both head and heart!
The Family Islands are crucial to preserving our culture and heritage, and also key to our national development.
We have opened airports in Ragged Island and Great Harbour Cay, and as I said earlier, we have begun the process to redevelop 14 airports throughout our Family Islands.
The Family Island Development Trust Fund will assist in developing Family Island infrastructure, allowing revenues generated in the Family Islands to stay in the Family Islands instead of going into the consolidated fund. This is a game-changer for so many of our island communities.
Major roadworks are currently taking place in the Exumas, and we are in the process of building a number of solar microgrids throughout our Family Islands. A priority in the coming year is to build sustainable, renewable energy projects throughout our islands, which will lower costs and encourage investment.
Madam Speaker:
Under our first budget we took care of our public servants by working through the promotions and regularization backlogs in New Providence and the Family Islands. Back-pay and gratuities were paid, public service pensions were increased, and salary increases were secured for thousands of public servants.
This includes our beloved teachers and nurses, who received salary increases and additional benefits, including a retention bonus for teachers, a $100,000 insurance benefit for the loved ones of nurses who die in the line of duty, and an additional $10 per hour increase for nurses serving during times of disaster. While these increases were well-earned, we know they deserve even more, and will continue to work toward securing additional compensation.
Madam Speaker, when we signed an MOU with local unions prior to the last election, we committed to improving labour relations.
Now, 19 new union agreements later, we have kept our word. Within these agreements are pay increases and increased benefits for thousands of public servants.
We have increased the national minimum wage – a move that was long overdue – but not even seriously contemplated by our predecessors.
The choices made by governments matter, Madam Speaker.
The members opposite tried to scare us off of. They told us raising pay for workers could negatively impact businesses and cause jobs to be lost. But we had done our homework and we were confident we were making the right call – we knew increasing paychecks for Bahamians was both the right thing to do and the smart thing to do. Now, here we are, many months later: businesses are booming, and employment numbers continue to grow.
You see, it is possible to help working Bahamians and attract new investment.
In fact, during our first 20 months, we have secured well over $1 billion in new investments, evidence of the confidence that investors and the business community have in our governance.
How does that stack up to the first 20 months of the previous government? It’s hard to remember any investments of note from that period – perhaps because that period was defined by the Oban fiasco, rather than new investment in the country.
Madam Speaker:
The problem of crime is a serious one, in our country and throughout our region.
It is not a single problem, of course – instead it is many problems, intertwined – including poverty, neglect, mental health issues, a lack of education or skills or opportunities,
substance abuse.
This complexity means there is no single or simple policy solution. Instead, we need action on multiple fronts.
We have expanded Urban Renewal, as well as a Second Chance programme, to reduce recidivism.
We recruited hundreds of new Police, Defence, Correctional, and Immigration officers, and increased funding for saturation patrols in high crime areas. We are working to stop gang recruitment in our schools.
I want to say to all Bahamians: when our young people join gangs because they want to belong somewhere, or they don’t see other opportunities, or because they think that’s the only way they can stay safe – as a society we have failed them. We all need to do more. The government can and must bring significant resources to the table. But we will always need partners. I am so grateful to church, non-profit and school leaders who turn towards the hardest problems, instead of turning away, and continue their outreach and support for families and individuals in crisis.
Madam Speaker:
We have launched a comprehensive immigration plan to protect our borders and enforce our laws. Our task force on shantytowns is working to ensure that when we dismantle illegal housing, we do not create a new homelessness and a crime problem. In solving one crisis, we cannot create a new one.
We continue repatriations at a record pace, even in the face of very strong international calls to stop. I have said very clearly to international leaders and organizations – The Bahamas cannot absorb the burden of crises unfolding in other nations. We will continue to take decisive action to protect our borders, and we will repatriate those who enter illegally.
Madam Speaker:
In the 21st century, our national security policy must also encompass measures to strengthen our defences against climate change.
The next time we face a national disaster, our nation will now have the considerable assistance of the members of our National Youth Guard, who have been trained to assist existing personnel in a variety of capacities. These young people, who have prioritized service to their nation, and are ready to play an active role in protection, rescue, and recovery, deserve our congratulations and gratitude.
It was very moving for me, attending the graduation of the first cohort in Grand Bahama, to see their pride, and the immense pride of their parents.
You know, it’s so easy to focus on the negative. But if you do that – you miss the reasons to feel good about Bahamians and The Bahamas. You miss the many causes we have for optimism.
The young Bahamians in our Youth Guard fill me with hope. When we talk about becoming more climate-resilient, many people think first about infrastructure. But we should also think about people – the role that our people can and must play in strengthening our defences. They will save not just our lives, but our way of life.
Madam Speaker:
I know I said I would be brief when laying out some key steps forward that we’ve taken, and perhaps I stretched the definition of “brief” a bit far.
But, in fact, I was exhibiting self-restraint. There is more to say. I hope my colleagues will share more in their contributions, so that Bahamians have the fullest possible sense of what is underway.
And Madam Speaker, the story of the first 20 months of this administration must include this final fact:
We took all of these steps forward as a nation while increasing government revenues, decreasing the deficit, and improving governance through amendments to the Fiscal Responsibility Act, the Public Finance Management Act and Public Procurement Act.
Despite the health, economic, fiscal, and inflation crises we inherited, we have not made excuses. We continue to forge ahead with our plans for national development and empowerment of all Bahamians.
Strategic National Development
Now, during these 20 months, we have largely ignored the nearly daily barrage of attacks on us by the members of the party opposite. It is true, they sometimes take a break from attacking me to attack each other, but eventually they find their way back to their default setting of partisan warfare.
I have noticed something very strange about their attacks: it’s as if they believe every Bahamian in the entire country has simultaneously developed amnesia – and remembers nothing about their very recent time in office.
But we do remember. We are doomed to remember, because we are still living with the consequences. Before the bungled handling of the pandemic, there was the tragic and inept handling of Dorian. And before that, there was the shock 60% increase to VAT.
What exactly did they do during their first 20 months, Madam Speaker? I would say nothing, but they did worse than nothing, because they actually set the country back. They entered office on the strength of a slogan, but that was all they had. Now they want people to believe that they have answers?
Recovering from the multi-crisis state we inherited required a comprehensive slate of reforms, initiatives, and policies to empower Bahamians.
The 2023/2024 budget builds on last year’s budget.
We are building on the foundation that was set over the past 20 months. Our strategy is cumulative, and it is strategic. Many initiatives are big enough to require multiple years to fully develop.
Remembering the ad hoc chaos of the previous administration, I get that they may not know what strategic national development looks like. Well, they need look no further.
There is continuity across budgets and alignment across major policies.
And since this is serious stuff, I have a request to make, of the members opposite.
Don’t just oppose – propose.
You borrowed billions – more, as a percentage of GDP, than many of our regional neighbours — and left the country deeper in debt. You carry on about us collecting taxes from large taxpayers that are long overdue – but where is YOUR plan to pay the debt YOU incurred?
While in opposition during the pandemic, we released two plans: a COVID response plan and an Economic Recovery plan. We understood that simply criticizing without offering an alternative did not contribute to the public discourse.
Their attacks on this budget and on this government should not be taken seriously unless and until they offer serious alternative proposals.
2023/2024 Budget
Madam Speaker:
The 2023/2024 National Budget is titled: A Budget for Security and Progress.
The budget reflects the Government’s commitment to strengthening national security, economic security, and personal safety and security.
This new budget is a continuation of our efforts to secure the nation’s borders, invest in crime prevention, strengthen climate resilience, increase food security, promote Bahamian ownership, expand affordable housing, and invest in education, training, and empowerment.
Revenue
Madam Speaker, when it comes to revenue generation, our focus has been on simplified and more effective tax administration.
These efforts have been spearheaded by the Ministry of Finance, the Department of Inland Revenue, and the Revenue Enhancement Unit. As a result, we are set to exceed our own target of $2.85 billion, which we set for the current fiscal year. The deficit will also improve to $389.5 million, down from $575.4 million.
Thanks to the progress we’ve made, we remain on track to have the first-ever budgetary surplus by 2025.
This new budget continues where the last budget left off, with a focus on more effective tax administration.
Recurrent Revenue is projected to be $3.316 billion for the 2023/2024 fiscal year and the deficit is expected to be $389.5 million – a significant year-over-year increase in revenue and decrease in the deficit.
Madam Speaker:
This is good news for The Bahamas. Every patriot should applaud this news.
I have a quote here from August 2014 from a fellow named Dr. Hubert Minnis. In this quote, he said “I don’t believe in increasing taxes, I believe in decreasing taxes and increasing opportunities. Increasing taxes is a lazy way out. When you don’t want to think, you just tax.”
Now, I don’t know if this Dr. Minnis fellow in this quote is the same Dr. Minnis who increased VAT by 60% on the Bahamian people, but if it is the honourable member for Killarney then he should be elated to know that this budget achieved what he couldn’t: avoiding tax increases for Bahamians while creating opportunities for the Bahamian people.
Quite frankly, Madam Speaker, it is shocking to see the amount of revenue experts who have, all of a sudden, sprung up from the woodworks in the opposition. You wouldn’t believe this is the same crew who raised VAT and had nothing to show for it. They led this nation to record deficits and left an economy in shambles. Suddenly, they are the world’s brightest economists.
The member for Killarney described our efforts as a “tax crusade” a few days ago and the member for Marco City continues to search desperately for new angles for his complaints.
But the fact is, we made extraordinary efforts to protect Bahamians from any new revenue measures.
95% of new revenue will come from non-Bahamians.
As for tax collection — when we talk about $800 million in Real Property Taxes owed, the vast majority of these taxes owed are not owed by your average, everyday Bahamian, as homes under $300,000 do not pay real property tax.
There is no crusade. Talk to any Bahamian about taxes, the first thing they will say is: instead of raising new taxes, the government should collect all the back taxes on the books and stop people from ducking their tax bills.
Under this administration, everyone must now pay their fair share, including the friends of the FNM. We all know that ONE letter from a certain community out west was all it took for the FNM to drop their planned tax measures – they dropped it the very next day. That must be the most efficient decision their government ever made.
In our very first budget we lowered the VAT rate, and lowered customs duties on essential foods and goods.
Taking a look at the previous administration’s budgets, we can see that they gave tax breaks for caviar, airplane parts, and the infamous decision to lower duties on washing machine parts – like we don’t know who owns the biggest laundromat chain in the country. Come on, man.
Madam Speaker, we are enforcing laws that are on the books.
Perhaps the members opposite want us to allow some special people to avoid adhering to our laws, just like they did. But this is a new era for fairness: Nobody is above the law. And everyone will pay their fair share.
On that note, we are Establishing a Large Taxpayer Unit to improve compliance and revenue collection from the 100 businesses that account for $1.7 billion in taxes.
Madam Speaker, when the member from Killarney was challenged in November of 2021 on his decision to call an election eight months early, he defended it by saying he thought he needed a new mandate, because he saw headwinds coming, and “very, very, difficult decisions” needed to be made.
That sure sounds like someone who wanted to raise taxes on the Bahamian people after they voted, not before.
Our government did indeed face those headwinds, but instead of bringing in any increases, our administration lowered VAT from 12% to 10%. When consumption taxes are lower, people spend more, and revenues go up. VAT receipts are now on track to increase by over $100 million during this current fiscal year. This is what happens when strategic tax cuts are paired with a booming economy – revenues go way up.
Some of the benefits of cutting VAT may be difficult to feel in your pocket, because of the global inflation crisis. But our data models indicate that even when we account for inflation, consumer spending is up. That is largely correlated with the decrease in VAT, decreases in customs duties, and a well-managed economy.
The FNM slammed the Bahamian economy with 60% VAT, crippling the middle class.
They said their VAT increase would add more revenue – they were dead wrong.
They said our VAT reduction wouldn’t work. They said we would lose $100m in revenue, instead we have gained revenue.
They claimed their tax increases would grow the economy and stimulate commerce and again, they were dead wrong.
They cannot win the discussion on taxes, so they will focus on fees.
But remember — 95% of new revenue will come from non-Bahamians – and yes, that was a very deliberate policy choice.
One example is the adjustment in Departure Tax for cruise visitors from $18 to $23 for departure from Nassau, Freeport and Bimini; a departure tax of $25 from all other islands; and $35 for departure from a private island. Air Departure Tax will stay at $29. We have also introduced a tourism environmental levy of $5 for each cruise visitor and a $2 levy for tourism enhancement. The $2 levy would go into a special fund not the Consolidated Fund.
Cruise tourism is an important feature of our tourism product but its economic impact has been limited due to concessions provided to cruise ship operators. We are now seeking to address these matters.
Madam Speaker:
Key revenue policies in this budget are focused on prioritizing business growth within the economy through legislative reform, and administrative changes to ensure business owners are encouraged and supported within the means of the law. With this in mind, we are making strides to simplify the means by which business owners renew their licenses. The calculation of business revenue has been clarified in the legislation, decreasing confusion, and supporting a straightforward renewal process.
In accordance with priorities to support domestic business growth, the government is moving towards a cohesive, interlocked system of processing business applications. Within this new budget, provisions are made whereby all businesses applying for duty concessions must have a current business license and be tax compliant. This ensures business duty concessions are utilized by those operating within the means of the law.
Madam Speaker
We are encouraging better record keeping within businesses and encouraging proprietors to be responsible for honest reporting. In this regard, only businesses with revenue in excess of $250,000 would be required to have electronic records or seek assistance from an independent accountant for their renewal application. As such:
• While all businesses are encouraged to keep proper records, businesses with revenue between $100,000 and $250,000 can present management accounts to support their application.
• Businesses with revenue between $250,000 and $500,000 would require accounting certification by an independent accountant.
• Businesses with revenue between $500,000 and $2.5 million would require a compilation report by an independent accountant.
• Businesses with revenue between $2.5 and $5 million would require a review statement by an independent accountant.
• Large taxpayers, namely businesses with turnover above $5 million would require audited financial statements produced by an independent accountant.
Madam Speaker:
Additionally, non-Bahamian land-owners will be required to show proof of real property tax registration and payments before being granted a building permit. This will ensure compliance from the very beginning with Real Property Tax, limiting the likelihood of arrears.
Furthermore, in the upcoming budget year we are strengthening the Business License Act, the Real Property Tax Act as well as the Stamp Tax Act, to ensure that there are provisions of enforcement to penalize offenses. Such amendments will harmonize enforcement with the sanctions set forth in the VAT Act. In doing so we are ensuring that business owners, and related agents are operating in good faith. Ultimately, we expect that such amendments will reduce tax evasion and capture revenue forgone through avoidance.
Madam Speaker:
The marine sector is another area where there has been chronic under performance in revenue. Some of this under performance could be attributed to bad policy, which we are now correcting.
Currently the combined duty and VAT rate is too onerous in comparison to registering the vessel in the United States, Jamaica or Cayman Islands, so many Bahamian pleasure boat owners are avoiding registering the vessel in The Bahamas and instead just paying the $1,000 cruising permit. In this budget, we are eliminating both the duty and VAT and putting in place an updated fee schedule for the registration of pleasure crafts. This shift will encourage domestic registration of these vessels.
Madam Speaker:
In addition, we have put in place a maritime revenue task force, which would be tasked with growing the amount of revenue generated from the maritime sector. This would be done in several ways: adopting new policies which encourage compliance; educating law enforcement agencies on maritime revenue opportunities, and implementing a new compliance strategy in which updated penalties for non compliance would be an important feature. This would include using technology to properly assess entities which utilize the seaboard for docks, marinas and other purposes.
Although we are investing considerable resources in revenue administration, we must be smarter in how we use those resources as they are not unlimited. We are implementing a national revenue targeting centre. This centre will be situated in the Ministry of Finance and use software to identify anomalies in revenue reporting among taxpayers, which would allow for a much more streamlined process for the use of audit resources.
Madam Speaker:
Our revenues are headed in the right direction. The government’s fiscal health is much improved –and there is no indication that things will slow down any time soon.
This is what competent governance looks like.
C. Expenditure
Madam Speaker, as we increase government revenues, we are committed to remaining disciplined in our spending.
We understand that a more prosperous Bahamas will yield more revenues in the long term through increased economic activity and growth. Currently, to achieve that outcome, we must create a more secure economy. To that end, the capital expenditures we use to make these investments are projected to grow by a modest $5.6 million year-over-year.
Security is a fundamental building block of national development. It refers not only to national security issues like crime and border security, but also to economic and social issues.
Security includes the need to build a more resilient and diversified economy, with greater Bahamian ownership and opportunities for high-income jobs.
It includes greater health and wellness and access to healthy foods and treatments for people at all income levels.
It includes income-equality and the need to continue to take steps toward a liveable wage, because we know how expensive life has become.
It includes food security and food production, lowering our food import bill and empowering Bahamians to feed themselves.
Housing, social security, and education all fall under this holistic view of security as a stabilizing force in our nation. Through increased security, we will build a solid foundation that will benefit Bahamians for years to come.
While we refer to this budget as a budget for security and progress, it could also rightly be called a budget for progress through security. Under this umbrella, we have a number of key initiatives that will provide a platform for progress.
At the top of our agenda is National Security.
Securing our borders remains a priority as we forge international alliances and invest in four new vessels for the Royal Bahamas Defence Force to better patrol our waters.
Our Immigration Plan, Operation Secure/Restore, is the most ambitious plan ever conceived to tackle the undocumented migrant situation in our history. We will continue the trend of swift, record numbers of repatriations and we expect to take action on the shanty town soon through the work of the new Shanty Town Task Force.
Of course, we cannot talk about National Security without talking about crime. Chronically high violent crime levels continue to plague our communities, casting a shadow of fear over law-abiding citizens.
Every life lost to the epidemic of crime is one life too many. Bahamians continue to cry out for help. While we acknowledge that crime is a complex social issue that government alone cannot fully control, there are efforts that we must take, because every Bahamian has a right to feel safe in their homes and communities. To know that there are communities and even schools within our country where that right to safety and security is infringed upon daily, is simply unacceptable.
That is not The Bahamas I want to live in. It’s not The Bahamas I want to see our children growing up in. Many people have become numb to it all. You can see it on social media where people are uploading videos of various acts of violence ranging from assault to murder. There is casualness with which violence is regarded that should not be the norm for our country.
Our approach must be strong. It must send a message to all of the criminal elements in our society that they will no longer be allowed to hold law-abiding citizens hostage with fear. Our response must also be holistic, and focused on the cultural and social maladies that have contributed to this epidemic of violent crime.
Despite the efforts of successive administrations, crime remains a stubborn social ill.
My administration has already launched several initiatives, some of which have shown promising outcomes, but none have yet produced the down-turn we would all like to see.
We have expanded the Urban Renewal Programme for community outreach.
We have recruited hundreds of new Police, Defence Force, Correctional and Immigration officers to add much needed manpower as we increase funding for more saturation patrols in high crime areas. And we will continue to recruit more officers.
In the budget before us today, we are continuing with our holistic approach to fighting crime, which includes prevention, detection, prosecution, punishment, and rehabilitation – in other words, we will invest in social interventions, policing, legal and justice system reforms, and local rehabilitative and correctional facilities.
In this budget, community centres will be renovated to keep our young people off the streets and provide them with positive, enriching activities.
A new judicial complex is being considered to expand the capacity of the courts. New vehicles will be purchased for the police force.
We have finalized details and will move forward with our plans to build a Women’s Shelter and provide increased legal aid for victims of domestic violence. We will also allocate more resources for the social support of domestic violence victims. It has already taken too long for these initiatives to be done and we will prioritize the launch of these initiatives as soon as is feasible. Violence against women is a major issue within this nation and I want to re-assure Bahamian women that we are very serious about starting these initiatives within this fiscal year.
We will continue our support of NGOs throughout The Bahamas, many of whom, in their own ways, are working on interconnected issues that contribute to our current crime woes.
National Security should never be an issue that is cheaply politicized for short term political gain. As I said in my communication last week, while we must take strong action on immigration and crime, what we must not do is allow the seeds of xenophobia, hatred, classism, sexism, and racism to take root in our politics. We have come too far as a people, too far as a nation, to allow demagogues to cheapen the quality of our national discussions with nasty and divisive rhetoric.
This is not to say that Bahamians do not have a right to be passionate about these issues or even angry. It is also not to say that Bahamians shouldn’t hold the government accountable to do its part – we welcome accountability. But we don’t welcome hatred and violence in any form. I ask all right-thinking Bahamians to join us in elevating our national dialogue and condemning the hate that has emerged in certain small pockets of our society.
We must reject this poison and hatred. It is just not who we are.
Infrastructure Investment
Madam Speaker:
There are certain fundamentals that a government must get right if it is to be deemed a success. National Security is one of those core areas. Another central area of national importance is infrastructural development.
Our roads and transportation systems, communications and electrical networks, water and sewage pipelines, and physical structures all play a central role in providing jobs, promoting growth, attracting investors, and, ideally, providing Bahamians with quality experiences when they make use of these systems and structures.
The comprehensive roadworks in the Exumas was a much needed improvement to the roads in one of our emerging economies. Other road projects will be rolled out in Cat Island, Long Island, Eleuthera, and New Providence.
Several months ago, the government launched a preliminary RFP process requesting bids for airport development in The Family Islands. That process will now begin moving forward as we prepare to redevelop 14 new airports in our Family Islands using the same Public-Private Partnership model that was so successful for the Lynden Pindling International Airport. Family Islands that will benefit from this major redevelopment process, can expect a similar degree of transformation as seen with Nassau’s airport -not necessarily at the same scale but at the same quality.
Just as a reminder of all the airports included in this process, it will include:
- New Bight International Airport on Cat Island
- Exuma International Airport in Moss Town, Great Exuma, and Staniel Cay Airport, Black Point Airport, and Farmer’s Cay Airport also in the Exumas.
- Leonard M. Thompson International Airport in Marsh Harbour, Abaco will also be a part of this process, as well as the Treasure Cay Airport and Sandy Point International Airport.
- In Eleuthera, it will include North Eleuthera International Airport, Rock Sound International Airport, and Governor’s Harbour International Airport.
- Long Island International Airport will be included, as well as Congo Town Airport in South Andros, and San Salvador International Airport.
We are talking about improved, modern facilities, as well as expanded capacity for increased arrivals. Grand Bahama airport is a part of a separate process that will also see a modernization and upgrade process. Counting Grand Bahama’s airport that is actually 15 airports throughout our archipelago – all located on Family Islands.
We said we were moving away from the Nassau-centric model and these are the first steps. It is no coincidence that almost all of these islands also have major, multi-million dollar investments in existing or new resorts and attractions also in the works.
This is an example of the kind of alignment between strategic investments and national development we are pursuing, as we prepare to see significant growth in our Family Island economies. This is not to mention the $22 Million allocated for the adoption of Solar technologies on sites in Mayaguana, Inagua, Crooked Island, Acklins, and Long Cay – a major investment in renewable energy for our southern islands.
Madam Speaker.
No part of The Bahamas is being left out of this wave of national development.
Cost of Living
Madam Speaker, it is no secret that the cost of living in The Bahamas has caused great hardship for many Bahamians. Our dependence on imports for a majority of the goods consumed here has taken a financial toll on many Bahamian households and businesses. The global inflation crisis has only worsened the situation. We get most of our imports from the US, so when their annual inflation rate for the past two years has hovered near or above 5%, it has a compounding effect on our own inflation rates as we must pay their prices, plus the costs of shipping and any related duties, taxes, and fees.
Food prices have been particularly bad. In a typical year, food prices go up in the US by about 2% but from 2021 to 2022 prices went up by as much as 11% and then again from 2022 to 2023, prices went up by nearly 8% – far above the usual 2% rate. Once again, even in times of inflation we must pay their price plus shipping, duties, and other taxes and fees.
That is simply to get the item here.
If that item is being sold locally, then the cost and profit of the local business plus 10% VAT are added onto the final price. Considering these facts, it is because of the global inflation crisis that prices have spiralled out of control in The Bahamas.
Of all of these factors I have outlined, the government only has short-term control over two of them: Customs duties and VAT. Those are the two mechanisms in this entire process through which can take immediate actions that could have a direct effect on prices. In consideration of this fact, we lowered VAT from 12% to 10% and we lowered or eliminated customs duties on a number of healthy food items and other essentials. By taking action, we were able to somewhat mitigate the impact on Bahamian households. However, because of historically high global inflation combined with the compounding effect of all the additional costs of importing an item, this was not enough to prevent prices from rising.
Another area where the government can have an impact is on price controls, which limit the amount of profit a business can make on specific, protected items. Once again, we took action by introducing new price controls, and hiring new price control inspectors. While this prevents retailers from making exorbitant profits by putting a cap on their profits, it cannot reverse the impact of global inflation.
However, it was a necessary act to protect Bahamian consumers at a time when the cost of everything is going up and they cannot afford for any local businesses to take advantage by making outlandish profits. For those who were paying attention, you would note that we went to bat for Bahamian consumers to make this happen, ensuring that these protections were put in place. It could not completely alleviate the impact of rising costs, but we are living in a time when every dollar counts.
Lowering VAT, lowering customs duties, increasing enforcement on price controls, and introducing new price controls – we used an all-of-the-above strategy in our attempt to provide some relief. Prices still grew at a rate that none of us are comfortable with – a rate that hit the pocketbooks of Bahamian households. But I do believe that our policies made a difference – even if it only prevented prices from increasing even more. Every dollar counts.
To complement these activities, we provided more support to Food Programmes through social services. This allowed us to provide additional help to those who need it the most. We have also provided for salary increases outlined in multiple public sector agreements, benefiting Police Officers, Defence Force Officers, Prison Officers, Social Workers, teachers, nurses, and many others. In fact, we have signed a three-year agreement, to run from July 2022 – June 2025 to increase allowances and salary scales through a $40 Million Industrial Union Agreement, and we have allocated funding to the Ministry of Finance for a thorough evaluation of salaries in the public sector to ensure equitable compensation.
For Grand Bahama, where opportunities for employment are very needed right now, we have allocated $4.5 million for an employment programme.
We also increased the national minimum wage so that those at the bottom of the pay scale could better make ends meet. For all the public servants and minimum wage earners who benefitted from these increases, I am certain that these pay increases provided much-needed relief. Having more money in their pockets helped to cushion the blow of this inflation crisis. In this upcoming budget cycle, we will also be exploring the roll out of a Public Service Contributory Pension Plan so that public servants can get increased benefits upon retirement.
But all of those actions don’t fix the central issue at hand: prices are way too high for everyone.
And hearing about these kinds of limitations is not what Bahamians want to hear. People have been crying for relief and we have done our best to use every option in the book – an all-of-the-above strategy – to manage this situation. Providing relief for our people has been our number one priority.
But to the average Bahamian, something about this situation just doesn’t feel right. There must be something more we can do – something more the government can do.
I want the Bahamian people to know that we agree with you – although the path to those solutions may take some time to lead us to where we want to be. There are two major things the government can do in the medium-to-long term, to change this situation for good.
Food Security
Madam Speaker:
The government has committed to lowering our food import bill by 25% by the year 2025. It is an ambitious goal reflecting the fact that immediate action must be taken.
We have introduced historic investments in agriculture and food security.
The ‘Golden Yolk Egg Program’ is an example of the kind of large-scale action we can take on this issue. More investments are coming in poultry production and other high consumption areas of agriculture.
By targeting these large areas, we are simultaneously increasing food production in high demand areas that also have the greatest potential to impact the food import bill, while also securing large scale opportunities for Bahamian farmers. We are not talking about subsistence farms here, Madam Speaker. We are creating unprecedented, profitable opportunities for Bahamian farmers and agribusiness entrepreneurs.
Funding was set aside specifically to provide grants and loans to this group. Other support will be given as well through the new Agriculture Administration Cadet Program, the expansion of BAMSI, the development of additional Farmer’s Markets, and the supply of equipment to local farmers.
This historic investment also includes the use of Smart Green Houses, agricultural research facilities, the fishing pot programme to train local fisherman on how to make and use fishing pots, and the Citrus Tropical Orchard development, which will be located in Andros, Cat Island, and Eleuthera.
Our children will learn about opportunities in farming within our primary schools, and they will get hands-on experience through the ‘Hydroponic Program and Rise Bed’ initiatives. This is how an industry is built, Madam Speaker, by providing opportunities for entrepreneurs, providing technical and technological support, and by educating children for the opportunities of tomorrow.
As long as our food import bill is so high, we will always be limited in our ability to manage inflation. Through agriculture and fisheries, we can finally start making progress on feeding ourselves and being less reliant on expensive imports.
The next big solution that will allow us to drive local costs down is energy reform.
The solar farms being built in Mayauana, Inagua, Crooked Island, Acklins, and Long Cay are just the beginning of what will eventually be the widespread solarization of the Family Islands – just like with Ragged Island, these islands will benefit from a more stable electrical supply and more affordable electricity.
Throughout The Bahamas, we will also encourage the adoption of solar power by local businesses, through the allocation of $20 million that will specifically be used to facilitate the solarization of small and medium-sized businesses. We encourage the business community to take advantage of this opportunity to lower costs through renewable energy.
The approach to energy reform in New Providence will be multi-phased. The cost of electricity is far too high and people need short term relief. Unfortunately, solarization in New Providence is a far more costly and time-consuming venture. However, we will continue to pursue avenues to explore a feasible approach to significant solar power generation for residents of New Providence, because in the long term it will be worth it. Renewable energy is the future of power generation, and it is time for The Bahamas, inclusive of the Family Islands and New Providence, to take real steps toward a sustainable future that will provide more stable, more affordable power for everyone.
We also understand that people need help right now. That is why we are completing negotiations for LNG power generation in New Providence to make electricity more affordable.
These are real solutions that will be initiated this budget cycle, Madam Speaker. At the end of this process, Bahamian households and businesses will appreciate our efforts to provide real relief for them. These are not one-off stop gap measures, but major developmental initiatives. We are not tinkering at the edges. We want to transform the economic and infrastructural fabric of our nation, to make life better for all for decades to come.
Madam Speaker:
Renewable energy is important, not only because of its economic benefits, but also because of its benefits to the environment. As one of the most vulnerable countries in the world – a country that has become a leading voice on the issue of climate change – it is critical that we practice what we preach on climate change.
But to make the necessary investments, we will need more resources. More assistance will be needed from the wealthy developing nations who are the primary drivers of climate change. This is why I have championed the cause of The Bahamas and other Small Island Developing States on the world stage, and advocated for the carbon-producing countries to do more to help us.
While it is critical that we continue to advocate, we are not content solely to sit back while global temperatures continue to rise. In this budget, $80 million will be dedicated strictly for the mitigation of the impact of climate change through climate resilient infrastructure.
Meanwhile, we will continue to complete our foundational research for the generation of blue carbon credits, to produce additional funding for climate resilience through a market-driven approach.
As I said before, even small countries like ours have a role to play in helping to move the planet towards net zero. In fact, our very survival as a nation is dependent on global progress toward this goal. It is in our best interest to do everything we can here and abroad in the fight against climate change.
Healthcare
Madam Speaker, in this upcoming budget cycle we will continue with the initial work done during the current cycle to strengthen healthcare. This is an area of great concern for Bahamians who rely on our public services to meet their healthcare needs. We know that public healthcare is a far cry from where it needs to be, so we will continue to invest in improving government clinics throughout the Family Islands, as well as constructing new hospitals in Grand Bahama and New Providence.
This is a game-changer, Madam Speaker. Overcrowding and resource challenges in our public hospital have gone on for far too long. I am sure both the public and healthcare professionals will be relieved to know that soon the modern facilities that they need will be available.
We will improve healthcare coverage through a consolidated healthcare policy, which will provide the benefits of NHI, as well as the prescription drug plan at a more cost-effective rate. We will also provide and expand private health insurance coverage for thousands of public servants. In the near future, we will provide more details on the announced National Organ Transplant Programme that will be initiated this fiscal year.
There will be a new day for healthcare in The Bahamas.
Education
So, Madam Speaker, we have addressed National Security, Food Security, Energy Security, and Health Security. Another central developmental pillar where we are making major investments is in education.
The National School Breakfast Programme will be launched this fiscal year and I am sure many children who are currently beginning their school days while fighting off the pangs of hunger will benefit greatly from this programme. Their parents will likewise be able to breathe a sigh of relief knowing that their child will be provided with a nutritious meal to start their day.
As we get our children off to a strong start, we must also ensure that their lessons become more enriching as well. We have increased the overall investment in education and we are expanding Bahamas Technical and Vocational Institute (BTVI) throughout the Family Islands.
To build on the salary increase and retention bonuses we instituted, we must also invest in more supplies and resources for our teachers, and hire and train more education professionals. The 200-plus teachers, aides, and counsellors we hired was a start, but more manpower is needed.
We will continue to engage those who dropped out of school during the pandemic with learning enrichment and additional support.
Madam Speaker:
One of the major objectives of the educational system is to prepare our young people for future opportunities. As such, there must be an alignment between what they are learning and the direction the economy is headed.
One of our primary focuses is the development of the Orange Economy. The beginning of construction for the first-ever National School for the Creative and Performing Arts, will mark a major milestone as we educate the orange economy innovators who will drive development of this sector.
We are also investing in athletics. Throughout the Family Islands, we are investing in sport facilities like the one being completed in Cat Island to promote sports and athletics throughout the nation by providing state of the art facilities for our young athletes. Grand Bahama will be getting a special project with the construction of a 50-meter pool.
We have set aside funding to promote greater interest and involvement in sailing as our new national sport.
Homeownership
Madam Speaker, as we invest in the security of Bahamians, we acknowledge that very few things make a person feel as secure as having a place that they call “home.”
Homeownership is a dream that has remained out of reach for many Bahamians. This is, in part, due to a lack of affordable housing developments in The Bahamas, after over four years without one affordable home being built.
There is now a surplus in demand that the government will move swiftly to fill, as we help more Bahamians to attain the Bahamian dream of homeownership.
In this budget, we will continue to fund affordable housing developments throughout The Bahamas in islands including New Providence, Grand Bahama, Abaco, and Eleuthera. This budget will allocate funding for the government’s innovative Rent-To-Own programme to expand the profile of people who are able to access their dreams of owning a home.
I remember last year when we first launched our housing initiative; one of the first people to get the keys to their home was still a teenager, Madam Speaker – a hard working young Bahamian who took initiative and it paid off for her in a big way. That is exactly the kind of person who will benefit from our housing programmes – people who have what it takes to be a homeowner, they just need a viable path to get there.
I’m believe the side opposite gets it, Madam Speaker. They may act like this is not a big deal, but they know how powerful homeownership is. That is why they trotted out a so-called development right before the last election. I say “so-called” because none of the prerequisite protocols or standards were followed, and none of the required groundwork was done, but at least they understood the marketability of homeownership as an idea that Bahamians cared about. It’s a pity that they only used it as a ploy to get unearned votes and not as a way to actually get more Bahamians to be homeowners.
But that’s why we are here, Madam Speaker: to make real what many thought was just a dream and fulfill a vision that many assumed was out of reach.
This is just a glimpse of what we will achieve through the 2023/2024 National Budget. There is a lot more that will be revealed as each Ministry presents throughout the course of this debate.
Delivering on Our Mandate
Madam Speaker, it is astounding how many of our major policies and initiatives have their roots in the ‘Blueprint for Change’, and our mandate to deliver a New Day for the Bahamian people.
We have lived up to our words and commitments made and we have no intent of letting up now.
It’s astounding to me that anyone on the side opposite can listen to what we’ve done in the past 20 months, and listen to how we will build on these achievements over the next twelve months, and simply say: “it is not enough”.
Not enough compared to what? Certainly not the four years when they earned the title of ‘Least Accomplished Government In Bahamian History’. I hope they didn’t think what they did was “enough”. We’ve done more in our first 20 months than they did in their entire four years as a government.
What we are building is a complete transformation of the agricultural sector, a repair of the damage done to our students during the pandemic, a renewed healthcare system, expanded home ownership, one billion dollars in investments throughout the nation, and record levels of arrivals as we continue to make our mark as a regional tourism mecca.
They will try to say there is very little “new” in this budget. And this is because they are not accustomed to strategic national development. These are not one-off initiatives, designed for political clout like the programmes they attempted to roll out right before the last election. These are long-term, nation-building policies that require continuity across budget cycles.
Madam Speaker:
Some seem to think that it is enough to claim credit for superficial attempts at half-baked policies, halfway developed, but never implemented.
They hear our announcements of policies we are implementing, and claim that they had the ideas first.
Madam Speaker, everyone has ideas.
That’s the easy part.
The real work is in the implementation.
We can all have the idea to fly to the moon, but it takes competence, skill and determination to actually get there.
They were all talk.
Our administration is about action.
But if we’re entirely honest, they didn’t really have many ideas for national development. It was all just a bunch of ad-hoc, responsive, outdated attempts at policies.
Can you believe all of this talking is coming from the crew whose most notable accomplishment was a 60% tax increase that failed to deliver?
What other non-issue will the opposition focus on during this debate?
Maybe Travel?
Madam Speaker, I believe the FNM is so critical of travel because they abused travel so much themselves. Do you remember the credit cards they secured for the spouses of Ministers?
If we are to be a respected voice on the world stage to represent our interests, then travel is necessary. If we are to forge alliances and build partnerships to benefit the nation, these kinds of things take time, especially when the previous prime minister represented the nation so poorly on the world stage, preferring to call us corrupt than highlight our excellence.
This nation deserves to be represented with dignity on the world stage. Building respect and credibility has benefits that are directly tied to our economic, social, and political interests.
But building partnerships and relationships isn’t like going to the store. You won’t come back with a specific item every time. But there is an intangible value being built up that eventually leads to the achievement of our national objectives. Anyone who has ever worked in marketing, knows the benefits of establishing your brand, expanding awareness of who you are, and marketing yourself to the world.
It is an essential part of our job. And it is reaping results. We have forged partnerships on border patrol and joined forces with other nations on regional gun smuggling. We are making headway in the areas of international trade and intellectual property protection. And we are working along with the rest of the Caribbean and to protect all of our nations from the ravages of climate change. These are worthy endeavors that will pay off.
Vice-President Kamala Harris is coming to The Bahamas, which is the first official visit by a sitting President or Vice President since Independence. You see, when you conduct strategic international relations, you don’t sit in a hotel corridor hoping that a world leader will spare you a few minutes. When you are representing yourself well, they come to see you. This face-to-face time with the leader of a global superpower will potentially yield important resolutions on many of the things we have been advocating for. But, once again, those opposite will attempt to undervalue this moment.
Just several months ago, we were able to pick up the phone in a time of need when I called the President of the Dominican Republic to get Bahamians evacuated from the Embassy in Port-au-Prince. Our people were evacuated within hours. This is the power of being a part of the regional and world community. We are not an isolationist state and never will be. Travel and interaction with our allies is a part of the job.
Just two weeks ago, on May 24th, The New York Times ran an article on climate change, praising my leadership, and that of The Bahamas. They said that “…The Bahamas has in recent years emerged as a leader among the nations…”
The year before, I was privileged to have participated on a panel convened by the New York Times on the subject of climate finance. My fellow panellists were David Malpass, President of The World Bank, and Kristalina Georgieva, Managing Director of The IMF.
This is more than a question of recognition, Madam Speaker. This is how our country has grown in stature and recognition during the past year and a half.
I know the side opposite may not be accustomed to seeing leaders in the government participate in such high-level global discussions. You don’t get invited to these discussions by talking nonsense about eating stew fish when members of the media ask you serious questions as prime minister.
It was past time we repaired and elevated our image on the global stage.
I was pleased that the current leader of the Opposition was able to join me on the Royal Coronation trip, partnering with me on a national projection of constitutional dignity – something his predecessor didn’t understand. So it was deeply disappointing to see that they chose to launch a series of nasty, personal attacks against both of us, while we were representing the country at such a significant constitutional moment.
Many people in the UK were impressed by the demonstration of political maturity which our presence demonstrated.
On a related note, I was able to have several audiences with King Charles, where it was made clear that The Bahamas was a priority.
Protocol dictates that I do not reveal the detail of those conversations, but we expect to make some key announcements within the coming months about substantial partnerships with some of the King’s organisations and interests, as well as with the UK government.
Madam Speaker:
I now wish to say a few words about the National Insurance Board. As has been said on several occasions, reform is necessary in order to secure the long-term future of the fund. The problems affecting N I B go back over many years. And we are resolved to address them.
And so last night, we issued a statement informing the Bahamian people of an increase in N I B contributions in the next fiscal year.
Everybody knows this is not a tax.
Everybody knows it is the insurance fund we all pay into to support us in times of need.
And so it is lamentable, Madam Speaker, that last night, the Leader of the Opposition chose to play the character of the long-suffering victim, complaining that by giving a year’s notice of the increase in N I B contributions, that somehow we were inflicting pain on the Bahamian people.
It was the wrong character, and badly played.
Does he want us to adopt the approach of his FNM administration, which, with no notice, introduced their 60% increase in VAT, and three weeks later, inflicted it on the Bahamian people.
That approach caused pain and suffering.
He should have learned from that act of folly, and instead chosen the character of the supportive friend, acting in the best interests of the Bahamian people.
Madam Speaker:
Isn’t it ironic?!
The very people who viciously opposed setting up N I B in the first place, now claim to care about N I B.
The very people who had to rely on N I B to save the Bahamian people during the pandemic, now don’t want to do anything to build it back up again.
But Madam Speaker, the Bahamian people know who to trust:
The people on our side, because the people who created N I B, are now going to save N I B.
D. Debt
Madam Speaker, as we experience progress, we are also conscious that discipline must be exercised in spending because maintaining healthy debt levels are integral to effective national development.
In a little over two years, our nation will begin seeing a budgetary surplus that will allow for us to begin chipping away at the national debt. In the meantime, we will see a slowing at the rate the debt grows. What’s most important is that any debt that is incurred must have sufficient return on investment.
What we don’t want is a situation like what we saw under the FNM when $2 billion on average was borrowed each year with nothing of significance to show for it: not a single major road, clinic, school or hospital to show for it. In fact, our infrastructure was crumbling under them. The only thing I can recall is the sidewalks they built during the height of the pandemic.
They also borrowed at excessively high interest rates because there was no market confidence in them. They were deemed a “risky” borrower. During the pandemic, other Caribbean governments borrowed far less than them but had better results. Take a look at the international rankings for how countries handled the COVID-19 pandemic and you will see their administration at or near the bottom of the rankings for most of the pandemic – shattering yet another fable they like to tell about their COVID-19 strategies.
We are climbing out of a debt hole created by them. Thankfully, our debt management strategies are paying off.
The cost of borrowing in the domestic market has been declining over the past quarters. The average interest cost for domestic loans subsided by 4.62 percent at the end of March 2023 from 4.89 percent in the previous year.
And the average interest cost for domestic bonds subsided by 3 basis points to 4.63 percent at end-March 2023 from 4.66 percent in the previous year.
These statistics affirm the government’s latest medium-term debt strategy, which aims to shift its borrowing away from costly external commercial debt. Such debt has seen a sharp increase over the past five years, including recent interest rate hikes. This strategic move will enable the government to once again rely predominantly on the domestic market to meet its financing requirements.
The Need for Answers on Spending
This is a major turnaround from the poor use of funds during the pandemic. The lack of transparency, the lack of proper records, and the complete disregard for procurement policies did not happen by accident. It was by design.
Once again, it is critical that any activity that contributes to the national debt has a justifiable return on investment. Not only do all the debt and economic indicators suggest that there was poor return on investment, but even if we wanted to take a look at the return, the lack of records makes that increasingly difficult.
There are a lot of outstanding and unanswered questions about the management of our finances during the Emergency Orders when all of the power was consolidated under one man. There are still outstanding questions about Hurricane Dorian, as well as activities that took place under specific Ministries throughout their term.
The Bahamian people deserve to know what resources came in and how it was spent. We are determined to find answers. If we are not transparent and if we do not hold those who abused the public trust accountable, we run the risk of losing credibility and trust in the international community. This would have grave implications for the next time we experience a disaster. Nobody wants to provide aid to someone they can’t trust.
There is deep suspicion that not all the funds were used in the way they were supposed to be. These suspicions have been deepened by the fact that many organizations involved are reluctant or unable to answer even basic questions.
Consider this an official reminder that we will continue with these investigations. Too much is at stake to just let it slide.
Accountability is a core value of this administration – both internally and externally.
I know there are those who have cynically proclaimed that “both major political parties are the same”. But I believe that it is clear that when it comes to accountability, when it comes to priorities, when it comes to making the right choices, there is a clear distinction between our track record and theirs. That comparison is insulting, considering how little they accomplished, and how much damage they did.
This budget will continue to demonstrate the contrast between our parties, and indicate to the Bahamian people that in September 2021, they made the right choice for a New Day.
F. Conclusion
Madam Speaker, we are still a relatively young nation with much to be proud of.
But there is growing anxiety in our society about the way forward. Many Bahamians are concerned that the Bahamas no longer belongs to them. Many are afraid of what the future holds for their children. Many live in fear of crime and are even afraid of falling ill because they simply cannot afford to be ill.
As a government, it is our duty to provide security – to build a foundation – for a better Bahamas. Our 50th year is a time for celebration of how far we have come but it should also serve as a turning point and a rallying cry for us to live up to our potential.
Progress doesn’t happen overnight. But the steps required to see that progress in a real and tangible way must happen now. There is an urgency with which we work, in recognition of the aspirations and dreams of the Bahamian people, and the kind of Bahamas they want to live in during our next 50 years as a nation.
The 2023/2024 budget builds on what is already working, while establishing key new initiatives that will change life for the better. The pillars of national security, economic security, and social security represent exactly what we need to continue to build momentum toward our vision of a secure, prosperous, and fair society.
I ask Bahamians to continue to work hand-in-hand with us. It is because and through them, that the real progress will be made.
And may God bless the Bahamian people as he continues to bless the Commonwealth of The Bahamas.
Thank You.
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